Global Telecom Revenue Growth Rate Drops Below 1%
In an era where all of its legacy revenue streams are mature and declining, with profit margins compressing, the core issue is the viability of the business model. Clearly, the key strategic challenge for virtually every operator is to discover or create brand-new lines of business, at scale, to replace revenue sources that are dwindling.
Looking only at the revenue top line can be misleading, in that respect, as aggregate financial results from some 68 service providers show a slight upward trend in recorded revenue since 2009 (roughly the trough of the Great Recession of 2008).
An important caveat is that results are far different in growth regions such as Asia or Africa, and mature regions such as Europe, North America and the Middle East.
Total recorded revenue has grown largely because hundreds of millions of new mobile customers are being added in some regions and because mobile data still drives incremental revenue growth in many markets. But rates of growth, in aggregate, are lower than top-line revenue suggests. That will matter as mobile market subscription growth slows, in Asia and eventually, Africa.
Also, the revenue growth rate has been far less robust than expected in the recovery from the Great Recession. In part, some would argue, that is because the global economic growth recovery has been tepid, as well, and telecom revenue has tended to correlate with economic growth.
Still, In three major regions (North America, Europe, Middle East), compound annual growth rates have even been behind growth of gross domestic product, according to analysts at Telco 2.0 Research.